The Autonomous Vehicle Economy

I’ve been toying with the economic consequences of the impending autonomous vehicle revolution for a while now and this recent IKEA thought exercise got me thinking about it again. ๐Ÿ”

For now, a brain dump in bullet point format. Maybe I’ll expand on/gussy up these thoughts in the future. ๐Ÿคท

  • Drie-thrus will die and be reborn. Fast food restaurants will struggle as their convenience factor will be eroded once hands do not need to be on steering wheels. Connected and networked cars will allow for safely ordering ahead and cars will become dining cars with expansive, outsourced kitchens. Any restaurant that desires could be a drivethru or grab-and-go establishment. A Ruth’s Chris at every interchange sliding surf and turf specials through windows to be eaten on the go. ๐Ÿฅฉ
  • Horizon lines are decluttered as billboards disappear. Why pay to mass advertise on a floating wall when you can deliver targeted messaging inside your dream customers vehicle on a heads up, digital dashboard product with dynamic creative tailored on the fly using input from onboard sensors and information and the targets data portfolio from the web. Or a subscription allows riders to opt out of all advertising and cruise in peace as the admire the landscape. ๐Ÿž๏ธ
  • The roadside motel/hotel/travelodge industry dwindles as cars assume the duty of sleeper car, transporting their charge as they sleep. Why stop and extend travel time if you can careen towards your destination while unconscious? ๐Ÿ›Œ
  • Roadside assistance and emergency response becomes a rare occurrence one vehicles form a networked hive mind that eradicates traffic and accidents and vehicles can predict, plan, and schedule all necessary maintenance. ๐Ÿšจ

Src: MIT Tech Review

Will Robots Understand Value? ๐Ÿ’น

A while back I wrote about how I didn’t think robots would become the new consumers in capitalism. Turns out I’m not the only one.ย ๐Ÿ‘ฌ

This piece scratches my economics itch in a lot of ways, but I think the heart of it is the fact that we typically believe the economy/market/capitalism operates like a rational machine and not an organism reacting to the wants and desires of a collection of irrational flesh bags.ย ๐Ÿ‘ฅ

But the threat is not real for the simple reason that the efficiency of production is not the problem that economy tries to solve. The actual problem is the use of scarce means to produce want satisfaction. Both means and ends are valued subjectively. Robots do not value.

This, once again, gets to the core of my AI belief system, that we shouldn’t try to recreate human brains in silicon or assume that AGI or superintelligence will mimic humanity’s actions and desires. It just seems like egoism disguised as science.ย โš—๏ธ

I want to include two quotes pertaining to value that I really liked in this piece. I think they are often forgotten or misunderstood.ย ๐Ÿ’ฑ

The natural resource it the same, but the economic resource โ€“ theย valueย of it โ€“ was born with the inventions. Indeed, oil became useful in engines, because those engines satisfy consumersโ€™ wants. The value in oil is not its molecular structure, but how it is being used to satisfy wants.

A good, sold in a market, is not its physical appearance, but the service it provides consumers in their attempts to satisfy wants. In other words, a goodย provides use value. And value is always in the eyes of the user. The value of any means derives from its contribution to a valuable economic good.

For further reading that provides another angle on why I don’t think robots and AIs will just slip into the existing capitalism and perpetuate it check out this piece by Umair Haque.

Src: Mises Institute

Joey Stigz on AI ๐Ÿค–

If you’re interested in the societal and economic implications of AI, this article is worth a read. A few points that stuck out to me: ๐Ÿ‘‡

  • AI can be hugely beneficial, but right now it’s not trending in that direction
  • Tech companies shouldn’t be in charge of regulating themselves, which means decision makers need to educate themselves
  • People are starting to value privacy more and become more wary of surveillance and data collection
  • AI will “take” jobs, but there will still be plenty of uniquely humans roles (health and elderly care, education, etc.) Guess we’ll find out how much we truly value that work.
  • Centaurs

Src: The Guardian

The Bot Economy ๐Ÿ’ต

A recent issue of the Inside AI newsletter included the prediction that eventually we will sell things to AIs. The inflection point is said to be when population growth levels off and capitalism foresees its downfall and doom. ๐Ÿ“‰

First, I think modern capitalism’s growth requirement is a bug, not a feature. Focusing on growth and appeasing shareholders can lead to a lot of bad decisions. I think we are better served by rethinking this aspect of capitalism, whether that means tweaking what we mean by that term or creating some kind of post-capitalism. But this has nothing to do with AI, I don’t think. ๐Ÿค”

Back on track, I don’t see the true trigger to create a bot economy. Why would AIs suddenly want to buy things? Why will AIs compete in the same exact way people and corporations do? This idea seems to be to be an anthropomorphizaton of AI by projecting capitalistic human characteristics in to them. ๐Ÿ“ฝ

Once AIs are competing with each other for work – by reputation, by differentiation, etc, they will need ways to distinguish themselves.ย  In other words, they will have the same issues humans have – they want to appear better/different than others.

I just don’t understand how we get from our current version of AI to algorithms competing with each other and doing so via an open market. Also, I’m pretty sure toasters don’t aspire to buy things. ๐Ÿคทโ€โ™‚๏ธ

Src: Inside AI

The Big 4 vs. The World ๐ŸŒŽ

I mentioned in yesterday’s post that there is a much higher demand for AI talent than there is supply. No surprise, but the answer for a lot of firms appears to be buying AI startups to help infuse talent. ๐Ÿ’ธ

Even less of a surprise, Google, Apple, Facebook, and Amazon are leading the way when it comes to quantity of acquisitions. The mind blowing part is that there were 115 acquisitions last year! ๐Ÿ˜ฑ

AI acquisition graph from CB Insights

Src: CB Insights

Centaurs Wear Ties ๐Ÿ‘”

I’m firmly in the Augmented Intelligence camp when it comes to where I think the real benefits lie when it comes to AI. Turns out the biggest benefit for business comes from pairing humans with machines, not replacing. ๐Ÿ‘ค+๐Ÿค–=โค๏ธ

In our research involving 1,500 companies, we found that firms achieve the most significant performance improvements when humans and machines work together.

Surprise, surprise, humans and machines are good at different things! Shocker, I know. But that means that, if done properly, they can be combined to achieve better results than either could individually. The dream and promise of centaurs. ๐Ÿ™Œ

According to this study there are 3 rolls humans need to fill with their machine counterparts ๐Ÿ‘ค:

They must train machines to perform certain tasks; explain the outcomes of those tasks, especially when the results are counterintuitive or controversial; and sustain the responsible use of machines (by, for example, preventing robots from harming humans).

And in a nice but of symmetry, the rule of threes applies to the machines as well ๐Ÿค–:

They can amplify our cognitive strengths; interact with customers and employees to free us for higher-level tasks; and embody human skills to extend our physical capabilities.

That second one, interact, is the hot button topic right now, as evidenced by Google’s Duplex and the reaction it garnered. ๐Ÿ–ฒ
Src: Harvard Business Review

The AI Space Race ๐Ÿ›ฐ

I’m very interested in how the AI boom will unfold on the international stage. It has all the makings of the next space race or arms race and more countries throw their hat in the ring every day. ๐Ÿš€

This post from Ian Hogarth is a great overview of what is “at stake”. I use quotes for that because it seems more ominous than I think it should. But there are certainly some potentially ominous outcomes depending on who wins the race. Or who losses… ๐Ÿฅ‡๐Ÿฅˆ๐Ÿฅ‰

The big 3 sectors ready to be shake up:

  1. Economy ๐Ÿ’ต
  2. Military ๐Ÿ”ซ
  3. Science & Technology ๐Ÿ”ฌ

What is required for countries to compete?

  1. Compute ๐Ÿ–ฅ
  2. Talent ๐Ÿง 
  3. Related tech ๐Ÿ’ฝ
  4. Stable/supportive politics โš–๏ธ

It’s also interesting to think about how AI and its impacts will vary by country due to each country’s unique mix of experience, culture, and economy. For example, Chinese AI will be (and is) very different from US AI. ๐Ÿ‡จ๐Ÿ‡ณ ๐Ÿ‡บ๐Ÿ‡ธ

I also wonder if we are heading towards a post-nation future that resembles some capitalist fever dream of multinational companies ruling everything? ๐Ÿค”

Or maybe it creates one global government, Illuminati style. ๐Ÿ‘

Src:Ian Hogarth

The Prediction Economy ๐Ÿ”ฎ

When you have a hammer, everything becomes a prediction problem. I may have gotten that one wrong, but when you have AI everything can become a prediction problem. AI is the new magic eight ball. ๐ŸŽฑ

But seriously, AI is really good at prediction and it can be done for pretty cheap in most scenarios. That means the cost of prediction has gone down. That’s bad news for people that make a living based off prediction, but good news for people that are in the judgement game. Not judgement in the social media sense, otherwise we’d all be rich, but in the “choosing what to do with the predictions” sense. ๐Ÿ‘ฉโ€โš–๏ธ๐Ÿ‘จโ€โš–๏ธ

This is a great, quick piece on the impact AI can have on the economy and jobs by driving down the price of prediction. TL;DR: problems/tasks that we’re previously prediction based may become so and the value add will come from judgement, which at least for now still looks like the domain of humans.ย โณ

Src: Harvard Business Review

Are We Blowing Bubbles? ๐Ÿ›

Are we in the midst of an AI bubble? ๐Ÿคทโ€โ™‚๏ธ

The field is definitely hot like Hansel right now, but I don’t know if we’re in what I would consider a true bubble. For one, the cat is out of the bag and people everywhere are salivating over the potential. I think we’re too far along to hit a true bubble burst. Will some startups crash and some companies downsize? Probably. (Just like cryptoss this insane ICO craze crashes, or gets regulated into submission.) ๐Ÿ“ˆ๐Ÿ“‰

But! Massive companies are all in on AI. Maybe you’ve heard of Facebook, Google, Amazon, Apple, or Microsoft… Academia is craving talent as well as student interest is high and faculty talent is defecting to the insane salaries of the private sector. ๐Ÿ’ธ

If/when this bubble bursts I think the only fallout will be the fields salaries returning to something within this solar system. ๐ŸŒŒ

Src: John Langford

FedCoin ๐Ÿ’ฐ

I’m an Econ major so my ears perk up at mention of the Federal Reserve. Cryptocurrencies have the same effect since I like tech. So this article was like catnip. ๐Ÿ˜ธ

The monetary policy possibilities of a potential FedCoin are really interesting, especially since traditional measures are not nearly as effective as economists would like to believe. I’ve long wondered why so many of these things are based on the assumption that humans are rational agents since there is so much evidence to the contrary, but I digress. ๐Ÿ‘ฃ

But I don’t think FedCoin would be a cryptocurrency as it would be centralized. I think it would be a new, digital form of fiat currency based on the crypto concept. ๐Ÿ’ต๐Ÿ“ฒ

I also bristle at the assumption at the end that a central bank is needed for currency control. If a new breed of digital finance became so popular that the majority switched over to it, wouldn’t that mean it is the proper choice? I know that monetary control is important for nations, but wouldn’t this move be a sign that we’ve become post-nation? ๐Ÿค”

The cryptocurrency and blockchain spheres are going to be really interesting to watch. Especially now that it’s gone mainstream and is garnering interest from monetary authorities and nation states. ๐Ÿ”ฎ

Src: Yahoo! Finance